Tom.com plans to raise $49.5 million

VivianChu

Tom.com, a China-focused Internet portal owned by Hong Kong billionaire Li Ka-shing, is planning to raise up to 385 million Hong Kong dollars ($49.5 million) through a share placement to institutional investors, local media reported on Wednesday.

The company’s main shareholders – Hong Kong’s biggest property firm Cheung Kong Holdings (CHEUY) and its biggest conglomerate Hutchison Whampoa (HUWHY), both of which are controlled by Li – will sell 60 million shares at a price of 5.08 Hong Kong dollars each, for a total of 304.8 million dollars. If investor demand is strong, the companies will sell another 15.8 million shares through a so-called green-shoe option, which would bring another 80.3 million Hong Kong dollars in proceeds.

After the share sale, Cheung Kong and Hutchison will subscribe for 80 million new shares at the same per-share price, regardless if the green-shoe option is exercised. That means Tom.com will receive new funding of up to 101.6 million Hong Kong dollars, according to local financial news outlet Quamnet.com.

BNP Paribas Peregrine is handling the sale. A BNP official declined to comment on the reports.

The share sale is the latest fund-raising exercise for the unprofitable Tom.com, which despite Li’s deep pockets has fired 130 people in the past two months. On Tuesday, Tom.com said it would shell out $100 million in cash and shares to buy two Web sites and an online sports advertising company in China, reflecting a recent shift in strategy to focus on the mainland China market.

Sohu.com and Warner Music promote Chinese concerts

Sohu.com, a leading consumer Internet portal in mainland China, said on Wednesday it will join with the music subsidiary of media giant Time Warner Group (TWX) to organize a concert tour of university campuses in 10 Chinese cities.

The campus concerts, which will feature popular local artists, kicks off this month at Beijing University and will tour in Guangzhou, Shanghai, Hangzhou, Nanjing, Wuhan, Changsha, Chengdu, Xi'an and Jinan until December.

Sohu.com (SOHU) will also design a Web site providing viewers live online coverage of the concerts, which will also be broadcast on local cable TV stations.

It’s the first time that Warner Music has linked up with a local Internet company to exploit the Web as a new channel for marketing and sales in China’s fast-growing domestic entertainment market. The company will use Sohu.com site to sell music on-line in China. Warner also said that the deal will extend its geographic reach and reduce music piracy.

For Sohu, the concerts will help distinguish it from the growing ranks of competitors and gain exposure among the young, educated, urban audience that it desperately needs to attract to its site. “Sohu and Warner Music target the same market segment -- the young generation that pursues a western lifestyle and increasingly has the financial muscle to make independent choices,” said the company in a statement.

CyberWorks takes control of Japan software maker Jaleco

Asia’s largest Internet company Pacific Century CyberWorks said that it has officially acquired a controlling stake of 55 percent in Japanese entertainment software producer Jaleco Ltd. after it issued new shares via a third-party allocation.

The announcement follows an earlier deal concluded last month in which CyberWorks (PCW) acquired 37 percent of Jaleco.

CyberWorks will assume management control of Jaleco and change its name to PCCW Japan K.K. It will also transfer most of its Japanese strategic alliances and investments to the company, said CyberWorks in a statement. The new entity will build the Japanese language version of CyberWorks’ much-hyped broadband channel, Network of the World (NOW), set for launch in Japan by mid-2001.

The new shares were also allocated to advertising agency Dentsu Inc., financial services provider Orix Corp. (IX) and entertainment ticketing agency Pia Corp., all of which have agreed to form a strategic alliance with CyberWorks in Japan.

Going forward, a second third-party allotment in November will raise CyberWorks’ stake to about 83 percent. It will also bring Jaleco a cash injection worth $262 million.

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